PROVIDENCE – Governor Donald L. Carcieri has announced a significant decrease
in the rate insurance carriers and employers will contribute to support Rhode
Island’s workers’ compensation (WC) system. Effective July 15, 2004, the
Workers’ Compensation Administrative Fund will reduce its assessment on the
premiums insurers charge from six and three quarter percent to six percent, a
reduction of $2.3 million. This change will affect workers’ compensation
insurance policies written in 2003. The assessment decrease should lower the
cost of most employers’ insurance and may help reduce the cost of doing
business. Assessment funds support the WC system including the Rhode Island
Workers’ Compensation Court and the Workers’ Compensation Division of the
Department of Labor and Training. Services include rehabilitative programs for
injured workers, investigation of fraud and employer compliance, education on
the WC system, and data collection.

The WC Administrative Fund was created to fairly distribute the cost of the
workers’ compensation system across the parties that use it, rather than
burdening the general taxpaying population. The Director of the Department of
Labor and Training is required to evaluate the cost of the WC system, then levy
a charge against insurers to cover fund expenses.

Adelita S. Orefice, the Director of the Department of Labor and Training,
attributed the dramatic reduction to several factors, including the Department’s
aggressive investigation and enforcement actions taken against employers who
fail to maintain workers’ compensation insurance. This boost in revenue, coupled
with increases in total employment wages and improved administrative efficiency
at both the Department and the Workers’ Compensation Court, caused revenue to
exceed expense and created the opportunity for the three quarter percent
reduction.

Judge George E. Healy, Chief Judge of the Workers’ Compensation Court,
complimented the Department on its efficient management of the fund. “The Court
has been diligent in monitoring and controlling expenses because we realize that
any inefficiency in management results in higher expenses for Rhode Island’s
employers. I am pleased that Director Orefice shares this philosophy and that
the Department has succeeded in reducing the employers’ costs. Today’s
announcement will have an extremely positive impact on the state’s economic
outlook.”

Workers’ Compensation is a no-fault system that requires employers to maintain
insurance coverage to protect their employees from loss of earnings and/or
medical expenses for any work-related illness or injury. The Workers’
Compensation Administrative Assessment is collected annually. For more
information, visit www.dlt.ri.gov/wc.

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